IMF Will Work on Portugal Bailout Plan With European Union

By Sandrine Rastello and Rebecca Christie -
Apr 8, 2011

The International Monetary Fund has
received a financial aid assistance request from Portugal and
will work on a bailout plan with European Union authorities,
Managing Director Dominique Strauss-Kahn said.

“We are prepared to move expeditiously on this request and
hold swift discussions with the Portuguese government, together
with the European Commission and the European Central Bank, on
an economic program, supported by the main political parties,
that could provide the basis for fund financial assistance,”
Strauss-Kahn said in a statement released in Washington today.

Portugal’s bid for emergency aid package, estimated at 80
billion euros ($115 billion), opens what European leaders say
will be the final chapter in the debt crisis that erupted in
Greece last year, spread to Ireland and triggered speculation
that the 17-nation euro area might not survive in its current
form.

The IMF has been providing part of the funding for Greece
and Ireland as well. Strauss-Kahn said the institution welcomed
a statement from European officials today “indicating
preparations will start immediately to reach agreement on a
program that will help Portugal meet the economic challenges it
is facing.”

EU Economic and Monetary Affairs Commissioner Olli Rehn
today said Portugal’s aid program will likely amount to about 80
billion euros ($115 billion) after the country became the third
euro-region nation to seek a bailout, while he called the
estimate “very, very preliminary.”

He said Portugal’s loans would be “most likely” for three
years, shorter than the 7 1/2-year maturities on joint EU-IMF
packages of 110 billion euros for Greece and 67.5 billion euros
for Ireland.